CONSTANT DOLLAR Definition

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CONSTANT DOLLAR is when the dollar amount is adjusted for inflation.

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OPERATIONAL GEARING is the higher the proportion of fixed costs relative to variable operating costs, the higher the operational gearing. This results in greater business risk. A retailer has high fixed costs relative to variable costs, so has a lot of business risk. See GEARING and FINANCIAL GEARING.

FIXED BOND pays an income stream and redemption payment at maturity that is fixed in monetary terms; however, high inflation will erode the real value of these payments.

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